Should You Accept B2B Credit Cards? Costs, Benefits, and Fees

Key takeaways

• Recognize that checks still carry high costs and the greatest fraud risk among payment methods.
• Offer credit cards to match customer preferences, speed up payments, and avoid losing sales.
• Weigh processing fees of 1.5% to 3.5% against the added sales and faster payments cards bring.
• Compare processors on fees, security, and accounting integration before you commit.

What is B2B credit card processing?

B2B credit card processing is the service that lets a business accept credit card payments from other businesses. It moves money from your customer’s card to your account, usually for a small per-transaction fee.

It works like the card processing you already know, but it is built for business-to-business sales. That often means larger payments, recurring billing, and a mix of payment methods like cards, ACH, wire, and check.

The B2B payment method conundrum

While paper checks are in decline, about 26% of B2B payments in the US and Canada are still made by check, down from 33% in 2022.

In other words, people who haven’t written a personal check in years are still writing and accepting commercial checks for B2B payments.

Why is this the case? It probably has a lot to do with the cautious nature of business.

Business owners who have always accepted checks may be reluctant to try something new. Customers used to paying by check may not see a reason to switch.

But perhaps you and your B2B customers are both missing out on the flexibility and benefits of accepting credit cards. Which leads us to question: what if checks are not the be-all-end-all of B2B payments?

Let’s explore this idea further.

What’s so bad about checks, anyway?

While they are familiar and widely used by businesses, paper checks also have quite a few disadvantages.

Why your customers may prefer B2B credit card payments

There are other payment methods out there, but credit cards come with unique benefits, making it a favorable payment option for consumers and businesses alike.

Here are three of the main benefits cited by B2B customers who choose to pay bills with a credit card:

Why accepting credit cards for B2B transactions is good for you

We’ve covered why your customers want to pay by card but, what’s in it for you? Glad you asked! Here are the top ways accepting a B2B charge on credit card helps your business.

The role of B2B credit cards in B2B payments

There are several types of B2B payments that customers can choose from when paying a business bill:

• Paper checks
• ACH/ direct deposit
• Cash
• Wire transfers
• E-checks
• Digital wallets
• Credit card

B2B card payments offer several benefits that may be uniquely tempting to business owners, including:

• Online/digital payment method
• The ability to pay vendors instantly, without immediately impacting cash flow
• Easy tracking of expenses
• Rewards and cashback
• Premium perks, such as airport lounge access or discounts for business services

In short, B2B credit cards play a key role in B2B payments by enabling businesses to provide an additional payment method for customers that is streamlined, convenient, and secure. While not the most popular B2B payment option, it is still very common, and more businesses today are choosing to offer it to their B2B customers.

Factors to consider for B2B credit card processing

If you are considering accepting B2B credit card payments, there are some considerations that will impact your business. Here are three things to remember about B2B credit card processing:

• Transaction fees: Credit card processing comes with certain fees and charges. High processing fees can impact the viability of credit card payments, so it’s important to choose a processor with competitive rates.
• Security: Credit card fraud is one of the most common types of fraud in the US, so it should be a real concern for businesses. Choose a payments processor that adheres to security standards, such as PCI DSS, to protect sensitive financial information and ensure your credit card payments are secure.
• Integration with your existing systems: If you choose to accept credit card payments, you need a processor that integrates seamlessly with your existing accounting and CRM software. Before choosing a payment provider, assess compatibility with your current systems so you can achieve a smooth and efficient payment process.

How much does accepting credit cards for B2B payments cost?

Credit card processing fees typically range from 1.5% to 3.5% of the transaction, depending on the provider and card type, worth weighing against the sales you could gain.

If you use Melio’s online B2B payment platform, you can send or receive payments by credit card at a fee of 2.9% of the transaction (and to accept payments, you can choose who covers the fee, you or your customers). Check Melio’s pricing for current rates and any volume-based options.

How to reduce B2B transaction costs

Reducing what you pay in fees starts with understanding how B2B payments work.

For example, an interior designer contracts an electrician to rewire a home and install new lighting. The electrician accepts credit cards via Melio, so the designer can pay the invoice online with a credit card. Melio is the payment provider, facilitating the electrician’s capability to accept credit cards and enabling customers to pay by credit card if they want to.

Compared to B2C transactions, B2B payments may involve larger sums and more complex terms, although not always. B2B bills can also be small, such as a catering company that provides fruit platters for business meetings. A B2B customer who orders one fruit platter may want to pay by credit card, even if the amount is not large.

One thing that all B2B payments have in common is fees. Almost all transactions have some form of a fee (Melio’s free plan includes up to 5 free ACH bank transfers a month, with paid plans for higher volumes). Here are some ways to reduce B2B transaction costs so the impact of payment fees is minimized:

• Negotiate better rates with payment providers: If your bank or payment processor is open to negotiations, try to secure lower transaction fees and better terms. If you have a high volume of transactions, this could be a way to convince them to offer a discount.
• Use ACH transfers: ACH transfers are typically cheaper than wire transfers, checks, and credit card transactions. If customers want to pay by ACH, this is a good option and you can encourage it. However, if paying by credit card is their preferred choice, then it might be worth covering the higher fees to make them happy.
• Use a digital payments platform: Online invoicing and payment platforms help to reduce the costs of paper checks, postal delays, and manual processing. Melio, for example, offers competitive processing fees. Also, you can easily track accounts payable and receivable, and schedule automated payments, helping to avoid overdue bills and late payment penalties.

What are you waiting for?

Managing your incoming payments and accounts receivable (AR) online with Melio means you can start accepting credit cards from B2B customers today. It’s a win-win: You get the money faster in your bank account, while your customers enjoy the flexibility and convenience of choosing their preferred payment method.

Take a few moments to sign up for Melio for a better way to get paid.

B2B credit card processing FAQs